THE LEGAL WORKPLACE 2020 - Workplace Insight
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ISSUE 03/2 In 2013, Bates Smart published our first White Paper – The Legal Workplace. The data in this paper predicted changes to the legal workplace over the next four years - all of which have proven accurate. In this paper, we update our key findings and look to the next four years. Lawyers are leaving their offices INCREASINGLY, LAWYERS OF ALL LEVELS ARE LEAVING THEIR OFFICES AND EMBRACING AN OPEN, COLLABORATIVE AND KEY FINDING 1 FLEXIBLE WORKPLACE. 2013 2 02 0 50% 10% 75% 35% Open plan 2007 2016 Office In 2007, 75% of legal staff were in offices. By 2016, this has reduced again with only By 2013, this had decreased to 50%. 35% of legal staff remaining in offices. We forecast that by 2020, only 10% of legal staff will occupy offices. Lawyers are sharing space LAWYERS ARE SHARING SPACE MORE THAN EVER, BUT NOT IN THE SAME WAY AS OTHER INDUSTRIES. THE LEGAL WORKPLACE REMAINS A PLACE FOR FOCUSED WORK, AND KEY FINDING 2 COLLABORATION OCCURS ELSEWHERE, OFTEN IN MEETING ROOMS. 2013 2 02 0 29% 34% Business wide collaboration 22% 31% spaces (as a % of total area) 2007 2016 In 2007, only 22% of the legal fitout was Between 2013 and 2016 this has increased by only 2% dedicated to business wide collaboration. and we forecast that by 2020 this will reach 34%. By 2013, this grew to 29% of the total area. Evidence suggests that how this space is used will change. Staff will require less local meeting rooms and more informal collaboration spaces as they acclimatise to new spaces.
ISSUE 03/3 A new model has emerged IN THE NEW LEGAL WORKPLACE MODEL, TEAMS ARE MORE FLEXIBLE AND MOBILE. TRADITIONAL SILOS ARE BREAKING DOWN. THIS WORKPLACE HAS A HIGHER DENSITY, ENABLING FASTER KEY FINDING 3 KNOWLEDGE SHARING IN A MORE COLLEGIATE ENVIRONMENT. 2007 2016 2020 24 sqm pp 16 sqm pp 10-12 sqm pp We forecast that by 2020, some legal workplaces will start to approach 12 sqm per person. While some firms will experiment with denser layouts up to 10 sqm per person, their teams may find this challenging. The hospitality revolution is here LAW FIRMS ARE DEVELOPING CLOSER TIES BETWEEN THEIR STAFF AND CLIENTS, CREATING A MORE PERSONAL EXPERIENCE. THE RESULT IS AN INCREASE IN HOSPITALITY SPACES FOR BOTH KEY FINDING 4 CLIENTS AND STAFF. Area of client meeting and hospitality spaces 14% 15% Staff and client shared spaces 6% 21% 30% OF 14% OF 15% In 2013 legal fitouts By 2016 this area has more than A small increase to 15% by 2020 dedicated 6% of their doubled to 14%. The growth in this would align the hospitality provisions total area to clients. space is mostly dedicated to client with the technology sector. None of this space was hospitality. Our data predicts a shift towards space shared with staff. Of the total client area, 21% is sharing with 30% of the area shared hospitality facilities shared with the staff. between staff and clients. Source: Bates Smart Legal Workplace Database 2016
ISSUE 03/4 LAWYERS ARE LEAVING THEIR OFFICES KEY FINDING 1 Law firms have been the last of the professional services industries to embrace a more flexible work environment, but that has changed and changed rapidly. AREA PER PERSON IN LEGAL FIRMS IS DECREASING From 2007 to 2016 we have seen the average area per person drop from 24 sqm to 16 sqm. 2007 2016 24 sqm pp 16 sqm pp BUT SOME FIRMS HAVE GONE EVEN FURTHER We have seen legal firms rival other professional services workplaces and decrease to 12 sqm per person. If this trend continues, this number could decrease to 10 sqm per person by 2020. 2020 10-12 sqm pp Source: Bates Smart legal workplace database 2016
ISSUE 03/5 16% 13% 33% 35% 29% 100% 33% CHANGES IN THE LEGAL Offices vs open plan 50% WORKPLACE Percentage in offices 58% Over the last decade there has been a shift 49% from hierarchical and cellular layouts to 33% 35% Percentage open plan more open workplaces with an equal space allocation. Space allocation by rank 2000 2013 2016 Those that have retained their offices Lawyers have ensured flexibility is built into their / 100% of Lawyers / 50% of Lawyers / 35% of Lawyers in offices in offices in offices workplace. Offices can convert to quiet rooms Senior Associates / Space allocation / Equal space / Where offices to allow firms to adapt to new ways of working according to rank allocation are provided, over the lifespan of the fitout. Partners this is often for Partners only Source: Bates Smart Legal Workplace Database 2016 WHY ARE THEY CHANGING? Increasingly law firms are creating a more In addition, law firms work hard to attract functional and flexible work environment. and retain highly educated, experienced This involves reallocating individually owned talent. Young staff want access to offices (me space) in favour of shared senior staff and their experience, valuing spaces (our space). There are three main interaction rather than eight hours of isolated drivers for this change. work – cellular office environments support neither of these demands. Double threat Law firms are facing a double threat – an The workspace as a business tool uncertain global economy coupled with Real estate is the highest cost to a law unprecedented competition. firm after salaries. Law firms have become increasingly aware that a significant The global firms have moved in and are here percentage of their workspace is under- to stay, capitalising upon the relatively stable utilised and therefore overpriced. and strong Australian market and using it as a ‘springboard’ to our Asian neighbours. The drive is for the tenancy to work harder, increasing the utilisation of all of the spaces, An increase in competition has led to more including individual work areas. fixed fee structures for legal work. Lawyers are looking to collaborative work methods to In addition, the legal workplace needs to deliver efficiencies and believe an open plan remain flexible to support change. The firm environment can better support this work. needs the ability to change configurations without construction costs every time a Knowledge sharing / social factors team expands or contracts. The primary resource of a legal office is the combined knowledge and experience of its staff. Firms are looking to access this ‘human database’ rather than allow siloing to continue. PICTURED Corrs Chambers Westgarth, Brisbane, informal breakout
ISSUE 03/6 LAWYERS ARE LEAVING THEIR OFFICES KEY FINDING 1 ‘Young talent is not interested in practicing law in the old way. Ask some 25-year-old law graduates how many of them enjoy sitting locked in a small office doing data reviews …"it’s a waste of money, brains and talent.’ Source: Michael Roche, Former Lawyer and Head of UK management consulting firm Kerma Partners, speaking at the 6th Annual Janders Dean Knowledge Management and Innovation Conference. WHEN PLANNING A LEGAL WORKPLACE THE ALLOCATION OF OFFICES IS THE MAJOR TOPIC OF DEBATE ‘Having an office doesn’t necessarily give you quiet time.’ ‘I need to hide from people if I want to get work done.’ ‘Without my office my productivity will plummet’ ‘I want people who are measured by the size of their brains not their office.’ Source: Quotes from Partners of major Australian law firms, obtained during briefing process PICTURED Allens, Brisbane, reception and client waiting area
ISSUE 03/7 70% IN 2013, WE FOUND THAT 62% THE MORE SPACE YOU OWN, 55% THE LESS TIME YOU SPEND THERE The amount of the workspace ‘owned’ by 45% individuals charted against the amount of 42% time spent at the desk. 35% 32% BY 2016, THIS HAS CHANGED As firms seek a more flexible model where 22% 22% 22% workspace is interchangeable between 14% different levels of staff, space for Partners 12% and Senior Associates has decreased. 2013 - % of workspace allocated per person 2013 2016 2013 2016 2013 2016 2013 2016 2016 - % of workspace Partners Senior Associates Lawyers Support Staff allocated per person Constant - % of work time / Partners and Senior Associates spend between / Lawyers and Support Staff spend between spent at desk 45% and 55% of time at their desk. 62% and 70% of time at their desk. / From 2013 to 2016, we have seen their space / From 2013 to 2016, their space allocation has allocation decrease in line with utilisation of space. increased to reflect their additional usage and ensure greater future flexibility to the firm. Source: Bates Smart Legal Workplace Database 2016 IN ADDITION TO CULTURAL CHANGE THERE IS A DESIRE TO GET MORE OUT OF THE WORKPLACE AS A BUSINESS TOOL Legal firms are looking to get more use out of their office space rather than having large offices sitting empty for over half the day. Technology and workplace innovations are allowing greater flexibility in how and where lawyers work. 1. Lawyers are noticing that the isolation of an office doesn’t equal an ability to focus. Library zones and quiet rooms offer a greater ability to ‘getaway’ than staying in your office. Isolation Focus 2. Legal work is often highly confidential and the office was a way of securing paper files. However, the highly confidential banking sector has developed document management systems and digital networks that secure data Confidentiality whilst enabling mobility and open plan work. Security 3. Advances in technology and e-filing mean that the office is no longer required to store walls of files. Lawyers are embracing the time saving and highly mobile attributes of digital record keeping. Paper storage e-filing 4. While the corner office is still a sign of status and hierarchy for some, many high ... performance CEOs have gone free range, sharing their experience with their teams. With increasing rents and pressure on profits not Knowledge Hierarchy having an office is a badge of fiscal honour. sharing
ISSUE 03/8 LAWYERS ARE SHARING SPACE KEY FINDING 2 Aligned with the reduction in offices has been an increase in shared spaces. These spaces, such as breakout and team meeting areas, are aimed at increasing collaboration, networking and the breaking down of knowledge silos. TRANSFER FROM INDIVIDUAL TO SHARED SPACE Since 2007, there has been an 18% space transfer from individually owned to shared space. 2007 48% of space was individually owned with space allocated according to rank 2013 40% of space was individually owned and all office sizes are equal 2016 30% of space is individually owned and all workspaces are equal Source: Bates Smart legal workplace database 2016
ISSUE 03/9 SPACE ALLOCATION Since 2007 there has been a dramatic increase in the amount of space dedicated to collaboration. In d ion tio n In tio n i vi at du la la di l cu cu cu a ll v id Ci r 25% 25% Ci r Ci r 25% yo ua l 30% In d i 2007 2013 2016 wne ly ow vidually owned d 40% ned 48% S ha 22% 14% es re Sh 29% ac 31% Sh d pa ed 6% ar sp 5% re s a ce sp d t s sp en ac nt ace C li C l i en t es C li e c e s s s p a spa ces In 2007 individuals ‘owned’ 48% of the floorplate By 2013, we see a shift of 7% from staff spaces In 2016 this allocation of space has almost reversed versus 27% allocated to shared and client spaces. to shared spaces – only 30% of the floorplate was the 2007 allocation. Only 30% of space is individually allocated to the individual versus 35% for client and owned and 45% allocated to shared spaces. shared spaces. This represents a blending of spaces, as staff share their space with clients and clients share their space with staff. Source: Bates Smart Legal Workplace Database 2016 WHY ARE THEY SHARING? Over 5 years ago our data showed that employees in top performing companies spend 14% more time collaborating and 25% more time learning than those in average companies. In addition, employees in average perform- ing companies spent 9% more time in isolated focused work. These top performing companies had 5% greater growth in profit and 4% greater growth in revenue. Put simply: sharing pays The new legal workplace understands this and is designed as a place for increased collaboration, knowledge sharing and innovation. Lawyers are working together to develop and share their knowledge base and client experiences. The ambition for increased collaboration must not come at the cost of the ability to focus. This still remains critical for lawyers. PICTURED Dibbs Barker, Sydney, breakout area / client and staff cafe
ISSUE 03/10 LAWYERS ARE SHARING SPACE KEY FINDING 2 The reduction in the number of offices has created space for shared facilities: team meeting areas, large communal cafes, quiet and focus rooms. FOCUS AND COLLABORATION The increase in shared spaces since 2007 has been tailored to the changing requirements of the legal workplace. ... Informal collaboration 80% increase in the provision of 2-4 person meeting spaces Social spaces 100% increase in the provision of breakout/social spaces Focused spaces 500% increase in the provision of small quiet, focus rooms - replacing offices Source: Bates Smart legal workplace database 2016
ISSUE 03/11 7% 6% 6% 5% 4% 3% 2% 2% 2% WHICH SHARED SPACES 1% ARE INCREASING? 0% 0% From 2007 to 2013 we saw an increase in both open collaboration and focused spaces. 2007 2013 2016 2007 2013 2016 2007 2013 2016 2007 2013 2016 By 2016, open collaboration spaces have Open Shared Breakout / Enclosed Enclosed decreased by almost 50%. Collaboration Social Spaces Collaboration Focus Rooms Why? Large open collaboration spaces are OPEN COLLABORATION SPACES - ENCLOSED FOCUSED SPACES - challenging for lawyers. They are too FROM 2013 to 2016 FROM 2013 to 2016 disruptive for those in the adjacent / 50% decrease in open collaboration spaces / 15% increase in enclosed collaboration spaces for team meetings on workfloors ‘quiet’ workspace. / 25% increase in staff shared breakout / social spaces / 2.5x increase in 1-2 p focus rooms, in line with the shift of more lawyers into open plan. Source: Bates Smart legal workplace database 2016 HOW ARE THEY SHARING? Since 2007 we have seen a significant increase in the number of shared enclosed spaces dedicated to team focus work. Rooms such as case / war rooms where teams can embed themselves are key to supporting lawyers in open plan layouts. As the cellular model breaks down we have also seen an emphasis on dedicated quiet rooms for individual focus work, away from distractions. There has also been a change in the type of open collaboration spaces: / Small open collaboration spaces immediately adjacent to the workspace remain critical for quick informal discussions / Larger centralised hubs (breakout spaces / cafes) aim to draw staff together from different teams in both social and work modes / Open plan layouts give staff an immediate visual connection across departments – something that is difficult to achieve in corridors of offices. PICTURED Maddocks Melbourne, void and interconnecting stair Following page: Maddocks Melbourne, external terrace
ISSUE 03/14 A NEW MODEL HAS EMERGED KEY FINDING 3 A new legal workplace model is emerging where teams are more flexible and mobile and traditional silos are broken down. This workplace enables team flexibility and knowledge sharing in a more collegiate environment. AN INTEGRATED WORKPLACE THE CHANGING STRUCTURE OF THE LEGAL WORKPLACE IS DESIGNED TO Changes to the legal workplace SUPPORT A NEW LAW FIRM MODEL accompany changes to the culture of knowledge sharing. Traditional Model The challenge in this model is that it only In 2000 the Traditional Fixed Team was the encourages interaction between teams dominant legal firm model. located on the same floor. Partners know / This model had a clear division of teams who to contact to tap into an existing within the firm (corporate, taxation etc) knowledge base, but interaction between and a strong hierarchy within each team others in the firm is minimal. Silos between (Partner, Senior Associate etc). teams still exist. TRADITIONAL MODEL / This model was supported by a cellular environment with limited firm or team The Emerging Model The fixed team Siloed structure. This is the traditional legal model. collaboration spaces. The Emerging Model aims to break down Lawyers are allocated to a team and the remaining silos between all members those teams work in isolation. of the firm so that every member of staff is Intermediate Model aware of the function and capacity of, not Over time, firms have restructured with a only their own teams, but all other teams in view to increasing knowledge transfer, both the firm. within teams and between teams. This saw the emergence of a new model – the How? By opening up the workplace and Mixed Team. allowing teams to be flexible and mobile, INTERMEDIATE MODEL creating sightlines between floors and easy The mixed team This model aims to encourage not only the access via internal stairs, and by creating Starting to break down the silos. top down transfer of knowledge but to also spaces to temporarily integrate team This model encourages further interaction between capture the benefits of different teams within members who need to share knowledge and practice groups but is limited to senior staff. the law firm working together and sharing create a collegiate environment. We know their learning, experiences and clients. The this as the Integrated Team. workplace reflected these changes with the emergence of more shared spaces: / A larger client floor with team training areas and a large boardroom to cater for client and entire staff functions EMERGING MODEL / Breakout hubs on each work floor aimed Integrated teams at bringing staff together Silos are further broken down. / Team war rooms on each level aimed at PICTURED All levels of staff develop networks to access expertise within the firm. accommodating both smaller meetings Opposite page: and high intensity work functions. Sparke Helmore, staff and client cafe
ISSUE 03/16 A NEW MODEL HAS EMERGED KEY FINDING 3 The Integrated Team layout provides a flexible arrangement of spaces which satisfy each of the work modes"–"focus, collaboration, learning and social spaces. WHAT DOES THIS MODEL LOOK LIKE? The traditional cellular fitout is replaced by The challenges open workspace clusters / neighbourhoods For law firms (as with many industries) with good sightlines. adopting a more open environment poses three main challenges: There is a plentiful distribution of open and 1. Ensuring adequate acoustic separation enclosed collaboration spaces for both 2. Finding privacy and quiet when required individuals and teams within close reach of 3. Maintaining confidentiality. work desks. These challenges are not insurmountable These spaces are designed to be flexible, and can be solved by intelligent design: modular ‘built spaces’ which are easily / Generous, customised desks with offset adjusted to suit the needs of individual design to aid acoustics and privacy practice areas or departments. / A high ratio of quiet rooms as well as larger enclosed rooms for longer term use by The benefits teams working together The benefits of this layout are numerous: / Technology for file storage and digital / Efficient use of floor plate security, enabling ease of mobility between / A more flexible and mobile work environment spaces. / Facilitation and encouragement of mentoring, skills development and real time Flexibility is Key knowledge sharing Many law firms are testing whether a more / A greater connectivity between staff, within open environment will suit their workstyle teams and across practice areas and culture. As such, their workspaces are / Open communication, creativity and designed with maximum flexibility. Built innovation and skilled minds working space is designed to be interchangeable - a together. simple move of a desk can convert space from an office to a quiet room to a team room. This design allows teams to select the way PICTURED they want to practice from day one and to Corrs Chambers Westgarth, Melbourne, change or evolve over time. interconnecting stair with meeting areas Opposite page: Dibbs Barker, Sydney, reception and client waiting area
ISSUE 03/18 THE HOSPITALITY REVOLUTION IS HERE KEY FINDING 4 As law firms look to strengthen client relationships there is a focus on in-house entertaining in signature spaces.
ISSUE 03/19 14% 15% 5% FRONT OF HOUSE CLIENT SPACES 21% 30% HAVE INCREASED SIGNIFICANTLY OF 14% OF 15% Since 2007 the configuration of client spaces has changed dramatically. Previously this was a series of enclosed rooms isolated from staff. The new Legal Workplace offers a suite of In 2007 legal fitouts By 2016 this area has more than A small increase to 15% by 2020 dedicated 5% of their doubled to 14%. The growth in this would align the hospitality provisions front of house spaces that are often shared total area to clients. space is mostly dedicated to client with the technology sector. with staff. None of this space was hospitality. Our data predicts a shift towards space shared with staff. Of the total client area, 21% is sharing with 30% of the area shared hospitality facilities shared with the staff. between staff and clients. Source: Bates Smart legal workplace database 2016 In our initial White Paper, we predicted Conversely clients are offered views into “the hospitality revolution is coming”. Our open plan work areas to display the depth database now shows it has arrived. of talent. A RANGE OF EXPERIENCES SHARING KNOWLEDGE Law firms have always focused on their A resurgence in knowledge ownership has client's experience and we have seen their resulted in increased demand for large scale preference vacillate between in-house and seminar and cocktail event spaces. external dining. These areas require flexibility so they can be Over the past four years, the emphasis used throughout the day. has been on a broader range of in-house hospitality offerings. Baristas, sky terraces Using operable walls they often adjoin and fine dining prevails as firms look to a reception and open out for large client personable and unique experience, akin to cocktail or town hall staff meetings. that of a five star hotel. These spaces can also open up further to MEET OUR TEAM the staff café / breakout space to create unique large scale entertaining spaces. Clients are looking to better know the lawyers with whom they work. They want to FLEXIBILITY be part of a team whose business is not too different from their own. In all of these configurations flexibility is paramount. By combining key areas, law To this end, firms are blurring traditional firms are both increasing their capacity for boundaries between staff and client areas. entertaining and increasing their space Staff are being invited to share some of the utilisation. client hospitality spaces, signalling to them their value to the firm. They are dedicating more space to client areas, but making it work harder. PICTURED Corrs Chambers Westgarth, Melbourne, reception and client waiting area Following page: Corrs Chambers Westgarth, Melbourne, staff and client cafe Ending page: Corrs Chambers Westgarth, Perth, meeting room
ISSUE 03/22 LOOKING EVEN FURTHER AHEAD TO 2030 ... Legal markets are undergoing disruption with new models of service emerging. There is pressure to decrease margins, increase productivity and improve client service standards. What does this mean for the workplace? LAW FIRMS CAN LEARN FROM TECH DISRUPTORS While 'robo-lawyers' remain in the distant future many time consuming and routine legal tasks are already being automated. To understand the impact of technology on the legal workplace, we look to other professions where technology has already had an impact. THE FIN-TECH WORKPLACE Fin-Tech achieves this level of workplace 3. Space utilisation - If law firms commit flexibility with three key initiatives: today to a lease, they need to build in the In the last five years advances in flexibility to grow or contract in the future. technology has revolutionised the 1. Agile Spaces - Technology workplaces financial workplace, coining the term ensure business agility with the ability to Flexible desking arrangements can allow a fin-tech. contract and expand their teams in different business to increase capacity by up to 20% departments at the same time. For this to just by adding chairs and monitors, and Fin-tech companies are now in a war occur they need to minimise specialised decreasing personal space. for talent, trying to hire programmers spaces, but support unique requirements. away from tech firms. Their workplaces This will require a high ratio of support often look more like start ups as they This is achieved with reconfigurable spaces. spaces to offset the increase in density. huddle in stand up meetings and work For example, an office can change to a in close knit teams. meeting room in under an hour. This allows Also, key infrastructure such as reception or different teams to occupy the same kit of comms rooms should be located centrally While t-shirts and ping pong may seem spaces in different ways. within the stack, in case floors are sublet. a long way from the legal workplace, there are some striking similarities: 2. Mobile Staff - The overall structure of AS COST PRESSURES INCREASE, firms will change. Divisions between practice EVERY SQUARE METRE OF A LEGAL / A similar workstyle requiring long groups will become more flexible. Teams FITOUT WILL BE QUESTIONED AND periods of individual, quiet, focused work need to be more mobile to flex or contract NEED TO BE JUSTIFIED. as demand for particular services arise. / Ownership by a group of partners who share equity in the business 1. There will no longer be the space to store Staff can easily move matter by matter to unnecessary paper and files, thrusting / Individual contracts for a broad client sit next to those with whom they work. base ranging in size lawyers into the digital age. Long term 'ownership' of desks and offices / The need to specialise across a wide inhibits the speed with which teams can variety of sectors reconfigure. Storage is the key. 2. Staff and social spaces will increase, but these will increasingly be shared across the entire fitout. Which begs the question, how do Storage = ownership = staff that are fin-tech firms accommodate the future difficult to move. 3. Many businesses share support and is this relevant to law firms? functions with other tenants, reducing the By reducing and centralising storage, staff demand for space. Building owners are FLEXIBILITY IS PARAMOUNT are less tethered to their desks and mobility increasingly offering large meeting suites is no longer a barrier to a project (or matter) to entice tenants. based environment. There is one certainty in this changing legal landscape; it will continue to change and evolve. The workplace model that a law firm selects today, will change in the future, often within the life of a tenancy. Let’s touch base again in 2020 to see if we're on track for 2030"…
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